Our first major indicator was the cross of the 50/200 Exponential Moving Averages which occurred in January of 2014. The last time these indicators crossed was back in the summer of 2003 following a massive monthly pattern in 2001 at 2.95000. This "Death Cross" contributed to the acceleration of the bear market following the topping pattern.
We are currently witnessing an identical inverse scenario taking place as we transition into a powerful bull market. Taking a closer look we can see a 2 year reversal pattern that formed from April 2011 - April 2013 with 1.4750 acting as the floor. Following the breakout of this impressive reversal pattern, we can take note of the 50/200 "Golden Cross". Remember, the last cross of these EMA's was back in 2003; a solid 10.5 years ago. We have remained in a bull market ever since the most recent "Golden Cross"
The recent price action has been exceptionally ; with this pair currently reflecting a massive . This channel developed following a complex pullback pattern that occurred after the "Golden Cross"; re-testing the 200 as new support.
Coming up to speed with last week, we had a massive form at the key level of 1.9000. This level acted as major resistance at the end of January 2014 which kicked off the Pullback Pattern. We have now re-tested that 1.9000 level as support with a that is indicating a new leg higher in this bull market.
Utilizing our Fibonacci Tool, we are able to measure and identify that each new drive off the bottom trend-line of the channel has occurred at the .618 of the previous up-move. Price then went on to target the 1.618 with 100% accuracy.
Keeping this in mind, the textbook price action of the last weekly pullback that ended with a reversal candle, point to the high-probability of the next wave targeting the 1.618 at 2.07500. What makes this target even more appealing is the fact that the 50% of the last leg down (measuring from the previous swing high at 2.7000 to the lows) lies exactly at the 1.618 weekly extension at 2.07500. If this target is reached, broken, and re-tested as new support, this opens up the .618 @ 2.22500 as Target 3.
Last week's provides us with the proper technical signal to enter a long position on GBP/AUD with 3 logical upside targets. Target 1 being the previous key resistance at 2.000 which triggered the most recent pullback. Target 2 is our 1.618 weekly as outlined above. Target 3 is the .618 of the previous leg.
So keep up the good work bro, this is huge! Thank you for all the effort you put into our education!